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Obama Administration Must Justify Decision to Mandate Labor Agreement


For New Hampshire Constructin Project Unclear How Excluding 89 Percent of State's Construction Workers, Most Local Construction Firms From Competing for the Project Will Lower Cost & Reduce Delays, Association Notes

The Obama Administration needs to justify its decision to significantly limit the number of construction firms eligible to build a planned federal facility in New Hampshire.  Noting that the decision effectively shuts out the majority of local construction firms and workers from competing for the publicly-funded project, the Associated General Contractors of America asked federal officials to provide documentation supporting and explaining their decision.

"How does severely restricting competition for federal work benefit taxpayers, help construction workers or support economic recovery," asked Stephen E. Sandherr, the association's chief executive officer.  "There must be a good explanation for why denying so many people access to economic opportunity makes sense."  

Sandherr said the association, which represents union and non-union contractors, is calling on officials with the U.S. Department of Labor to provide and publish their justification for requiring a government mandated labor agreement for the construction of a new Jobs Corps Center in Manchester, New Hampshire.  Union contractors also may find the government's terms and conditions too prohibitive to compete for the work, Sandherr added.

He noted that a recent executive order encouraging federal officials to consider mandating labor agreements was limited to projects worth over $25 million, and asked the Department to explain why it selected a project apparently valued at only $10 million. 

The association also noted that the Government Accountability Office and others have found little evidence that government-mandated labor agreements deliver cost savings, ease work-place tensions or protect against construction delays.  Given the lack of supporting evidence, Sandherr said the administration officials needed to demonstrate how their decision in New Hampshire would deliver benefits.

Sandherr added that only 10.9 percent of the state's construction workers are covered by a collective bargaining agreement.  Because government mandated labor agreements force contractors to hire employees through a union hiring hall, few local construction workers will be eligible to work on the project and few local firms are likely to bid on the project.

He said the decision was another blow to the state's construction workforce, which has suffered an 18.6 percent decline in employment since August 2008.  "When did denying unemployed construction workers the opportunity to earn a living become a good thing?"

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